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Constellation Brands Jumps on 4th-Quarter Results

- By Alberto Abaterusso

Shares of Constellation Brands Inc. (STZ) were up 0.12% to $179.90 in premarket trading on Thursday after beating consensus estimates by 12 cents with non-GAAP earnings of $1.84 per share for the final trimester of fiscal 2019. The result represented a 3.2% decline from the same quarter a year ago.

Non-GAAP earnings also soared 40% to $6.37 per share in the quarter. Revenue was $1.8 billion or 1.7% higher, beating expectations by $70 million. Revenue growth was driven by strong shipments volume of Modelo and Corona brands. The beer business segment contributed 60.6% or $1.09 billion in revenue and the wine and spirits business segment 39.4% or $707.1 million.

The U.S. global beverage alcohol company also posted results for the entire year of fiscal 2019.

Year-over-year, non-GAAP earnings increased 7% to $9.28 per share, GAAP earnings grew 53% to $17.57 per share, the operating cash flow jumped 16.3% to a record amount of $2.246 billion and the free cash flow skyrocketed 55% to $1.36 billion.

Further, during the year, the company repurchased 2.4 million of its common shares, investing $504 million.

Amid the most important projections for the full year of fiscal 2020, Constellation Brands expects non-GAAP earnings to range between $8.5 and $8.8 per share versus consensus estimates of $9.44 per share, and $1.15 billion for free cash flow.

Shares of Constellation Brands Inc. traded around $179.69 at close Wednesday for a market capitalization of $34.08 billion. The share price decreased 22% for the 52 weeks through April 3 to below the 200-day simple moving average line and above the 100- and 50-day simple moving average lines. The closing price on Wednesday was 19.5% off the 52-week low of $150.37 and 31.7% below the 52-week high of $236.62.

The 14-day Relative Strength Indicator is 65.45 suggesting the stock is neither overbought nor oversold.

According to the chart of Peter Lynch, the stock appears cheap.

Wall Street issued a buy recommendation rating on shares of Constellation Brands with an average target price of $209.88 per share within 52 weeks.

Disclosure: I have no positions in any securities mentioned.

This article first appeared on GuruFocus.